Singapore’s sovereign wealth fund (SWF) GIC announced an SGD326m (USD240m) investment in Arctic Green Energy, a Singapore-based renewable energy company with a focus on urban heating and cooling, as reported by The Straits Times on July 23. Arctic Green Energy will use the proceeds for its new geothermal energy projects and related capacity increases. The investment came amid the two’s recent agreement to establish a strategic alliance to promote zero-carbon district heating technology across Europe and Asia. In an official press release, Arctic Green Energy commented that GIC’s financial expertise, capital resources, and the international network would lend support to the company’s growth in new markets. JP Morgan [JPM:US] was the sole placement agent of the transaction.
Arctic Green Energy derived its technical expertise from the geothermal operations in Iceland. With an aim to deliver sustainable geothermal technologies to urban environments, the company founded Sinopec Green Energy, a joint venture with China’s Sinopec [SNP:US], in 2006 and has implemented nearly 600 central heating projects across 60 cities and counties in China’s northern provinces ever since. Today, Sinopec Green Energy is the largest geothermal district heating project developer in the world, with an annual electrical capacity of 15 megawatts (MW). In addition to this, Arctic Green Energy was also exploring markets in Central Europe. It recently joined hands with Budapest-based company FŐTÁV to develop district heating for the city that aimed to reduce up to 21,000 tons of CO2 emissions per year.
Arctic Green Energy was not the only green energy firm under GIC’s portfolio. The SWF established a Sustainable Investment Fund last July to support the clean energy transition and decarbonization effort of companies such as Duke Energy [DUK:US]. Earlier this month, it also partnered with Connecticut-based Lime Rock New Energy to invest in Qmerit, a renewable energy and electrification solutions provider. According to GIC’s chief investment officer Jeffery Jaensubhakij, the SWF would work with its portfolio firms to reduce carbon emissions while accelerating toward carbon neutrality within its internal operations. During the last fiscal year, the SWF itself achieved carbon neutrality across its ten global offices while seeing its best return in six years.